The UK's Financial Conduct Authority (FCA) and payments-as-a-Service provider Modulr have agreed on customer onboarding restrictions amid new regulations.
FCA Imposes Customer Onboarding Restrictions on Modulr
Modulr, a company in the payments infrastructure sector, serves over 200 clients, including Revolut, Wagestream, Sage, and BrightPay. It currently processes an annualized transaction value exceeding £100 billion.
The FCA restriction, issued at the start of October 2023, has prevented Modulr from onboarding new partner clients using its payments infrastructure for cards or accounts.
In response to the regulatory changes taking effect in the UK during 2023 and 2024, including the new UK consumer duty, adjustments to push payment fraud reimbursement, and a ban on incentive marketing for high-risk assets like cryptocurrencies, Modulr has decided to temporarily pause onboarding certain customer segments in the UK.
The company has begun notifying new partners of the delay, with expectations that onboarding may not resume until the first quarter of 2024. Modulr has not officially commented on the exact deadline.
FCA Investigates Revolut over Suspicious Account Withdrawals
Finance Magnates reported earlier that the FCA was investigating Revolut over allegations of allowing funds to be withdrawn from accounts flagged as suspicious by the National Crime Agency.
An estimated £1.7 million was reportedly released from such accounts between July and August. Revolut informed the FCA, but it disputed the amount, stating only £500,000 was involved. That added to Revolut's regulatory challenges as it awaited a UK banking license applied for in January 2021.
Concerns over auditing, compliance, and corporate culture within Revolut have arisen during the licensing process. Revolut operates as a payment institution in the UK and has expanded services internationally, including in the US.
Its quest for a US banking license has faced delays, with regulatory authorities indicating no pending applications. A spokesperson from Revolut declined to comment on the license application's status.
